This is a year of rapid progress and high expectations for the fintech sector. There was also a lot of noise – and hard, painful truths were learned. As it seems, some trends are more aspirational than practical. Here’s what I mean.
AI implementation: more hype than reality
As you could have noticed, artificial intelligence is dominating the headlines. Many corporations claim to have deeply transformative tools – but what do they really achieve?
In many cases, AI applications are limited to chatbots and call centers. True AI-based innovations – akin to adaptive financial modeling or real-time fraud prevention – are still limited.
The cost of developing and maintaining robust AI models is prohibitive for many smaller corporations. Additionally, there are ethical concerns about bias and privacy that prevent widespread implementation in areas akin to credit scoring or underwriting. For example, Revolut introduced With artificial intelligence enabled budgeting tools, but they mainly categorize expenses slightly than dynamically adapting to complex spending behavior.
So although it’s a sector with a high concentration of AI leaders, fintech – like 74% of corporations in various industries – tries to scale value.
Greenwashing is just as loud
There is an emphasis on sustainability in fintech, and yet many corporations promote green products without any basis on real impact. Many pushy initiatives – akin to carbon neutral cards – fall short of their claims and rely on unclear metrics. No wonder consumers are skeptical.
And although overall greenwashing is decreasing, latest RepRisk data shows that in 2024, 36% of corporations in the financial sector were still associated with “eco-dark” laundering.
Balance of expectations and reality
While some platforms successfully integrate payment and lending services, more complex offerings akin to wealth management remain fragmented. Users often encounter clunky interfaces and divergent expectations, especially when trying to change between services. Meeting these challenges requires a commitment to improving user experiences through iterative design and feedback loops. For us at BoBoIt took many months to tailor the interface and customer journeys to our customers’ needs, based on extensive user feedback from the initial limited launch.
Do regulations hinder development?
Given the industry’s sensitivity, regulators around the world have stepped up scrutiny of fintechs.
While this surveillance is intended to guard consumers in regions akin to the European Union and the US, complex compliance requirements akin to AI Act AND cryptocurrency taxation rules require startup resources. This hinders time and money that might be spent on development.
Looking ahead: what awaits us in 2025?
As we move into the latest year, I expect fintech platforms to leverage tools like gamification and content to empower themselves younger generations. They place a strong emphasis on gaining financial education and autonomy.
Blockchain and cryptocurrencies are back in the highlight, promising faster and cheaper transactions. Although adoption is still in its early stages, mainly because of regulatory uncertainty, 90% European financial leaders remain optimistic, expecting wider adoption in the future.
Beyond the hype, the importance of AI integration will only grow as corporations learn more about its capabilities. Moreover, embedded finance will proceed to grow as financial services change into increasingly integrated with non-financial platforms, enabling consumers to access banking, credit and insurance directly inside on a regular basis applications. In this case, cybersecurity will remain a top priority. Investments based on sustainable development will change into paramount. Millennials and Generation Z can look beyond greenwashing, which is able to force fintechs to integrate ESG rankings and influence investment options. To summarize, fintech platforms that may thrive in 2025 can be those who successfully leverage technology while remaining sustainable and offering seamless, personalized experiences.